21 Or. 268 | Or. | 1891
Lead Opinion
This is a suit to declare a deed, absolute in form, to be a mortgage, and for leave to redeem. On January 11, 1884, plaintiff’s intestate, George Marshall, being indebted to his sister, the defendant, in the sum of $15,203.13, as evidenced by two promissory notes for $9,000 and $6,203.13, bearing interest at the rate of nine and ten per cent per annum, respectively, as security therefor, conveyed to her by absolute deed one hundred acres of land near St. Johns in Multnomah county, and two lots in Conch’s addition to the city of Portland. On June 17,
It is admitted that although the conveyance from Marshall to defendant in 1884 was in form an absolute deed, it was in fact a mortgage, and the right of redemption could not be released or transferred by a mere parol understanding or agreement between the parties. An equity of redemption is inseparably connected with a mortgage; and so long as the instrument is one of security, whatever its form, the borrower has in a court of equity a right to redeem upon payment of the loan unless precluded by his own conduct, and this right cannot be waived or abandoned by any stipulation made at the time. The mortgagor may release the equity of redemption to the mortgagee, but being an interest in real estate, it can only be transferred or relinquished by a writing executed as required by the statute of frauds. This rule applies as well to a deed absolute in form intended as a mortgage as to an ordinary mortgage. (Peugh v. Davis, 96 U.S. 332; Odell v. Montross, 68 N.Y. 499; Shattuck v. Bascom, 105 N.Y. 39; Barry v. Hamburg Ins. Co. 110 N.Y. 1; Teal v. Walker, 111 U. S. 242; Besser v. Hawthorne, 3 Or. 129.)
While conceding the doctrine as above stated, defendant contends that in view of the facts in this case, as shown by the evidence, plaintiffs should not be permitted by a court of equity to redeem, and this is the only question for our consideration.
In case of an ordinary mortgage, the mortgagor is entitled as a matter of right to redeem the property pledged. In such case the right of redemption is given by positive agreement, and the fact that the transaction is a mortgage is recognized at law as well as in equity; but where a deed, absolute in form, is given as security for the payment of a debt, the mortgagor is compelled, under the system of jurisprudence in this state, to seek redress in a court of equity if
Ordinarily a court of equity will set aside an absolute deed, and allow the grantor to redeem as a matter of course upon proof of the fact that it was intended as a security for the payment of money, but it will refuse to interfere actively in his behalf when the evidence discloses that instead of preventing a fraud as against the grantor it would operate as a fraud and injustice upon the grantee. Being compelled to ask the interposition of a court of equity in his behalf, he must first have the standard of equity applied to his own conduct. If that condemn him he must go out of court. “ He who comes into a court of equity must come with clean hands,” is a maxim rigidly enforced and sternly applied to the conduct of any person who seeks the aid of a court of conscience. “One who comes for relief into a court whose proceedings are intended to reach the conscience of the parties,” says Mr. Justice Welles, in Hassam v. Barrett, 115 Mass. 259, “must first have that standard applied to his own conduct in the transaction out of which his grievance arises. If that con
Turning now to the facts, are plaintiffs in a position to ask the aid of a court of equity in their behalf? They stand in no better position than Marshall did, and unless he could if living maintain this suit they cannot. We think it is a fair deduction from the testimony that the settlement between Marshall and his sister was fair and just and made
No argument is required to show that under such a state of facts, to grant the relief sought in this case would be inequitable, unjust, and unconscionable. These facts strongly bear the impress of an equitable estoppel, and present such a case on the part of plaintiffs as will cause a court of equity to refuse to interfere actively in their behalf. They are seeking redress in a court of conscience, and must have the standard of equity applied to the conduct of their intestate and of themselves. Marshall induced his sister to believe the deed she had was sufficient to convey the legal title, and she having been misled thereby to her injury, he or his heirs will not be heard to say in this suit that such representation is not true. As between them, so far as this case is concerned, it is the truth.
We recognize to its fullest extent the principle, “that once a mortgage always a mortgage,” and that Marshall’s
Nor do we think there was reversable error in allowing the amended answer to be filed. The clause was still pending before the referee, and in the absence of a contrary showing, we must presume that plaintiffs had an opportunity to contest the allegation of the amended answer if they were so advised, and besides, the facts upon which our decision is based are substantially stated in the original answer. The granting or refusing amendments rests in the discretion of the trial court and can only be reviewed here for an abuse of such discretion.
Decree of court below reversed and complaint dismissed.
Rehearing
[Piled November 17, 1891.]
On Rehearing.
On the former hearing of this case, the facts as found by the referee were not seriously controverted, and consequently were in the opinion assumed to be established by the evidence. It is now urged by respondents that the alleged settlement between Marshall and his sister, and the declaration of Marshall that the deed was sufficient to convey the legal title, are not proven by the testimony. Their claim is, that the agreement was one of further security and extension of time in which to pay the debt, and there was no intention to convey the legal title to defendant.
As was said by ANDREWS, J., in Trenton Banking Co. v. Duncan, 86 N. Y. 230: “The authorities establish the doctrine, that the owner of land may by an act in pais preclude himself from asserting his legal title. But it is obvious that the doctrine should be carefully and sparingly applied, and only on the disclosure of clear and satisfactory grounds of justice and equity. It is opposed to the letter of the statute of frauds, and it would greatly tend to the insecurity of titles if they were allowed to be affected by evidence of light or doubtful character.” And, “moreover it may be added,” says Chancellor Bates, “that to warrant the interference of the court with the legal right or title of the party, the case relied on to work the estoppel must be clear beyond doubt, upon the facts.” (Jackson v. R. R. Co. supra.) Hence when an estoppel is urged which is to preclude the legal owner from asserting his title, the courts insist that the evidence must be clear, precise and decisive, so that the facts constituting the alleged estoppel may be clearly and satisfactorily established.
The claim of defendant is sought to be sustained, princi-pallly by the testimony of herself and her business manager, Sparks, given in response largely to leading and suggestive interrogatories. But assuming that the evidence for defendant proves that there was a settlement as claimed, and an understanding and agreement that the old deed executed as a mortgage ■ was paid and became functus officio, and that
Excluding Hughes’ testimony, who was consulted professionally by Marshall after the date of the alleged settlement concerning the final disposition of his property, and to whom he stated with a sense of impending death that he owned the property in dispute, subject to the lien of his sister’s debts, which would be conclusive if admissible, the number of witnesses and the preponderance of the evidence are in favor of the theory of the plaintiffs. Bésides, that contention makes the transaction consistent and the evidence harmonious. There is no pretense of any unfair dealing or intended wrong. For their own purposes the transaction, which was a security for a debt, was put in the form of an absolute deed.
The defendant came from her home in The Dalles to Portland, where she learned her brother could live but a short time, confessedly to collect her money or obtain more security, and it was in futherance of this demand that an aqjustment of their affairs took place. According to all the testimony, she got more security; the $5,000 mortgage on the property of Mrs. Marshall, in addition to the security upon the land contained in the old deed. The old deed was
As there is no imputation in the evidence of any wilful intention to deceive, it is more consistent to construe his declaration with that view which would not mislead but harmonize with honesty and fair dealing and which was in accordance with the purpose of her visit, to obtain further security.
A good deal of stress was laid upon the fact that at the time of or after the settlement, the defendant gave Marshall av contract for the sale of the land for two years. In other words, authorized him to sell it and retain as his compensation all above the debt and interest. As the transaction stood, there was no other way for him to act as a real estate broker of the land. To conserve their own purposes, the property always stood as to the outside world as the property of the defendant. Either before or after the settlement, if he wished to sell it, he would need a contract of sale from her to exhibit to intending purchasers as his right to do so. This was the only way he could deal with purchasers upon the record. Hence it was perfectly consistent with the transaction as a security and a legal necessity, as the record stood, for him to take a contract of sale from her, not as evidence of title between them but with the world with whom he proposed to deal. This view is further aided by the fact that the sum mentioned in the contracts as the amount to he paid her only covered the debt and interest.
Much was claimed for the fact that after the settlement defendant delivered her notes to Marshall. This is denied by plaintiffs, and diligent search among Marshall’s papers fails to discover the notes. But if true, it is at most only a circumstance in her favor, tending to support her theory,
It follows that the decree heretofore entered in this court must go for naught, and a decree be entered here allowing plaintiff sixty days in which to redeem, and upon failure to do so, the land be sold as on execution to satisfy the decree and costs.
Dissenting Opinion
(dissenting.) — I regret that I am unable to concur in the conclusions reached by my associates in the foregoing opinion. I concurred in the opinion first announced and adhere to it. In addition to this, I am unwilling to sanction the practice pursued in this case in this court. On the first hearing, it was substantially assumed that the findings of fact of the learned referee were correct, and the real contention was on questions of law. This court had a right then to assume that the facts were correctly found, and the opinion was predicated on that assumption.